Holloway City Issues Bonds in the Amount of $700,000 to Finance

Essay

Holloway City issues bonds in the amount of $700,000 to finance the construction of a sidewalk in a specific neighborhood.Repayment of the bonds will be derived from a special assessment on the owners in the neighborhood.The government accepts legal obligation for the construction of the sidewalk.Total interest on the bonds will total $35,000 and will be repaid at the time of repayment of the bonds.
Required:
Prepare the journal entries to record each of the following in preparation for (A) the government-wide financial statements and (B) the governmental fund financial statements.For the governmental fund financial statements, include the fund type in which the entry is recorded.Prepare all entries for (A) and all entries for (B) separately.
Journal entries to record:
1) Issuance of the bonds
2) Payment to the contractor
3) The special assessment by the city on the neighborhood residents
4) The assessment collection by the city
5) Payment of the debt on the special assessment bonds